Some thoughts on distinctive competencies, old school style.

I constantly think about the importance of getting down to either business strategy or processes when it comes to marketing or advertising (or anything happening inside a business), and it’s funny how I often think of it when the glaring examples of NOT doing so come up. Everyone claims to focus on these things, but it seems that (much) more often than not, companies don’t.

The standard definition of distinctive capabilty/competence is:

“Excellence in broader business processes, as opposed to a firms’ core competencies, which refer to areas of special technical and production expertise.” – Kotler & Keller, 2006

One of the most important parts of this concept is the ability to build the competency fully into your product design. The ability to integrate it into the firms’ activity systems determines how well it can be leveraged for actual competitive advantage. Often times these competencies set up the marketing opportunities perfectly. However, I don’t need to tell you, unless you do actually incorporate the competency into product design and processes, marketing isn’t worth squat.

So, what happens when your product or company, upon which you’ve developed a solid distinctive capability and marketed equally as successfully, is bought and someone else has the reigns?

Someone else has control over your brand positioning and your production processes.

It’s one thing to continue the brand positioning and messaging that existed prior, especially if it was good, effective and unique. But it’s another thing to carry that into the production process.

I thought about this after I was going through some old (gasp!) hard copy articles on the topic, and the example of Volvo was used to describe a successful distinctive competence (it was an older article, so it was still just Volvo). Volvo was the “safe” and “reliable” car, and this concept, in addition to being a marketing tool, went into every aspect of product design. It was actually a safe car (I come from a Volvo family).

When Ford bought Volvo in 1999, they continued selling it as a safe car. But, in my opinion (and many others’ opinions) they didn’t carry this into product design. They rode the coattails of previous marketing campaigns, but neglected to back it up with back end business processes. My family stopped buying Volvos at the 2003 S40 because it wasn’t running as well, and there were concerns about the level safety it was really providing. It just wasn’t the same safe and reliable car it was before Ford acquired it.

Again, I know I know, it’s all very obvious. But why do I still keep saying “duh!” all the time when it doesn’t happen?